Financial Analysis of PCBS and Intesa

ProCredit Bank Serbia

Bank’s Mission:
ProCredit Bank is a development-oriented commercial bank.
• Value transparency in communication with customers.
• Do not promote consumer lending.
• Strive to minimise ecological footprints.
• Provide services based both on an understanding of each
client’s situation and on sound financial analysis.
• Aim to promote a culture of saving and financial responsibility
among business clients as well as private individuals.
• Invest extensively in the training and development of our staff in
order to create an open and efficient working atmosphere and to
provide friendly and competent service for our clients.
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ProCredit Bank Serbia

•Target Groups:
• ProCredit is not for everyone…

• Aims for doers, achievers, determined “fighters”, who agree

with their values and their code of conduct.
• Focus on small and medium-sized enterprises.
• Private individuals who have the capacity to save, who prefer
to do their banking through electronic channels.

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 Non-Performing Loans -PCB

NPL 2016 2017 2018

Business 0,78% 0,92% 1,1%

Agriculture 0,84% 0,52% 1%

PI 2,1% 3,1% 3,9%

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Banka Intesa Serbia

•Bank’s Mission:
• Try to use every opportunity to apply their potential, especially
knowledge, innovation, considerable international experience, to
contribute to the domestic economy and improve the standard of
living for the people of the country.

• Encourage companies and entrepreneurs in their development

projects, help families protect and increase their savings and
realize their plans, support the younger generations and
contribute to the protection, preservation and promotion of
cultural and historical heritage of our country.

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Banka Intesa Serbia

•Target groups:
Intesa is a universal financial institution, they target various
groups of clients, no matter how big or small they are, but they
are mostly focused on retail.

• Small and medium bussineses,

• Agriculture,
• Corporate bussineses
• PI’s

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 Non-Performing Loans

NPL

2016 17%

2017 7,5%

2018 5,4%

NPL for Intesa Decreased from 200mil. EUR to 163mil.EUR as result of banks strategy:
Selling a part of the portofolio; Selling partially NPL portofolio; Collecting from their kreditors;
Transfering NPL Loans to performing loans; Writting off some of the NPLs

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Bank Intesa - Loan Portfolio Structure

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ProCredit Bank Serbia – Loan Portfolio
Structure
PCBS - Business and PI Gross Loan Portfolio
Development (M EUR) 737,964
686,263 636,266
5.03%
8.13%
6.51%

94.97%
91.87% 93.49%

Dec-16 Dec-17 Dec-18

Business Private Individuals
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Bank Intesa – Customer Funds

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ProCredit Bank Serbia – Customer Funds

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Number of employees of Banca Intesa

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Total number of employees of ProCredit
Bank Serbia

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Comparison between number of branches
of Bank Intesa and PCBS

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ProCredit Bank Serbia

Statement of Financial Performance (Millions, EUR) 2018 2017 2016

Interest Income 30,932 36,521 42,368
Interest Expenses (8,718) (8,044) (9,367)
Net Interest Income 22,214 28,476 33,000
Loss allowance 981 1,591 (583)
Net Interest Income after allowances 23,194 30,067 32,418
Fee and Comission income 9,187 9,745 9,559
Fee and Comission expenses (3,710) (3,215) (3,034)
Net Fee and Commission Income 5,477 6,530 6,525
Net result from derivative financial instruments 163 448 116
Other operating income or expenses 199 (2,313) (182)
Operating Income 29,033 34,732 38,877
Personnel Expenses (8,462) (9,567) (10,282)
Other administrative expenses (11,102) (11,829) (12,479)
Operating expenses (19,564) (21,395) (22,761)
Operating Result before taxes 9,469 13,337 16,116
Income tax expenses (1,627) (2,068) (2,456)
Profit for the year 7,843 11,269 13,660
ProCredit Bank Serbia

Statement of Financial Position (Millions, EUR) 2018 2017 2016

Assets
Cash and mandatory reserves with central bank 110,868 93,617 87,421
Loans and advances to banks 41,507 40,407 29,631
Loans and advances to customers 728,447 624,528 609,856
Financial assets 30,659 30,234 120
Property and equipment 16,349 17,883 18,127
Intangible assets 2,280 2,387 2,341
Other assets 6,901 7,982 6,806
Total assets 937,012 817,037 754,303

Liabilities
Liabilities to banks and IFIs 252,364 213,848 194,061
Liabilities to customers 517,932 442,692 401,204
Subordinated debt 31,306 31,388 32,714
Provisions 847 1,028 1,167
Other liabilities 2,905.37 4,481.78 3,989.17
Total assets 805,354 693,437 633,136
Equity
Subscribed Capital 31,136 31,136 31,136
Retained Earnings 62,574 54,732 52,456
Reserves 37,947 37,732 37,575
Total Equity 131,657 123,600 121,167
Total Equity and liabilities 937,012 817,037 754,303
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ProCredit Bank Serbia

ROAE – Net Profit divided by average

total equity

ROAA – Net Profit divided by average

total assets

Net interest margin – Net interest

income divided by average total assets

Average cost of funds – Interest

expenses divided by average interest
bearing liabilities

Average income on loans – Interest

income divided by average interest
bearing assets

Cost to income – Operating expenses

divided by operating income

Deposits to Loan – Deposits divided by

loans

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Intesa Bank Serbia

Statement of Financial Performance (Millions, EUR) 2018 2017 2016

Interest Income 198,655 194,148 192,259
Interest Expenses (24,508) (30,535) (31,487)
Net Interest Income 174,147 163,614 160,772
Loss allowance (27,687) (26,112) (37,245)
Net Interest Income after allowances 146,460 137,502 123,528
Fee and Comission income 100,015 90,059 79,481
Fee and Comission expenses (38,887) (34,165) (31,641)
Net Fee and Commission Income 61,128 55,895 47,840
Net result from derivative financial instruments 19,953 24,269 28,292
Net Result from derecognition of Financial Assets 287 1,404 (121)
Other operating income 11,082 10,572 10,207
Operating Income 238,910 229,642 209,744
Personnel Expenses (50,994) (48,465) (48,779)
Other administrative expenses (75,426) (70,577) (69,324)
Operating expenses (126,419) (119,042) (118,102)
Operating Result before taxes 112,490 110,600 91,642
Income tax expenses (5,356) (9,895) (7,285)
Profit for the year 107,135 100,705 84,357
Intesa Bank Serbia

Statement of Financial Position (Millions,EUR) 2018 2017 2016

Assets
Cash and mandatory reserves with central bank 739,182 704,239 870,153
Loans and advances to banks 280,834 248,655 319,530
Loans and advances to customers 2,887,867 2,566,101 2,309,874
Financial assets 792,237 1,106,940 1,040,311
Property and equipment 67,584 66,905 62,889
Intangible assets 32,086 22,190 11,453
Other assets 54,348 86,277 72,823
Total assets 4,854,139 4,801,306 4,687,034
Liabilities
Liabilities to banks and IFIs 431,347 275,188 289,471
Liabilities to customers 3,443,989 3,380,494 3,259,347
Provisions 15,310 10,857 14,905
Other liabilities 57,381.95 123,209.29 68,114.12
Total assets 3,948,029 3,789,749 3,631,837
Equity
Subscribed Capital 354,862 354,957 354,957
Retained Earnings 136,686 239,878 293,116
Reserves 414,562 416,723 407,124
Total Equity 906,110 1,011,558 1,055,197
Total Equity and liabilities 4,854,139 4,801,306 4,687,034
Intesa Bank Serbia
ROAE ROAA
2.77%
11.17% 9.75% 2.71% ROAE – Net Profit divided by average
total equity
2018 2017
2018 2017
ROAA – Net Profit divided by average
total assets
Net interest Margin Average cost of funds Net interest margin – Net interest
0.85%
3.61% 3.45% 0.65% income divided by average total assets

2018 2017 2018 2017 Average cost of funds – Interest

expenses divided by average interest
Average income on Cost to Income Ratio bearing liabilities
loans 47.42% 46.55%
6.64% 7.13% Average income on loans – Interest
income divided by average interest
2018 2017 2018 2017 bearing assets

Cost to income – Operating expenses

Deposits to Loan Ratio divided by operating income
131.74
119.26
%
%
Deposits to Loan – Deposits divided by
loans
2018 2017
Key Operational and Profitability Ratios for
PCBS and Bank Intesa

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References

• Procredit Bank Serbia

https://www.procreditbank.rs/sr
• Intesa Sanpaolo Bank Serbia
https://www.bancaintesa.rs/pocetna.1.html
• National Bank of Serbia
https://www.nbs.rs/internet/english/80/index.html

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